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QWEST COMMUNICATIONS CORP. v. CITY OF BERKELEY

April 4, 2003

QWEST COMMUNICATIONS CORP., PLAINTIFF,
v.
THE CITY OF BERKELEY, DEFENDANT



The opinion of the court was delivered by: Susan Illston, United States District Judge.

ORDER GRANTING PLAINTIFF'S MOTIONS FOR SUMMARY JUDGMENT AND DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
On January 3, 2003, the Court heard plaintiffs motion for summary judgment on Ordinance 6608-N.S., plaintiffs motion for summary judgment on Ordinance 6630-N.S., and defendant's motion for summary judgment. Having carefully considered the arguments of counsel and the papers submitted, the Court hereby GRANTS both of the plaintiffs motions and DENIES the defendant's motion for the reasons set forth below.

BACKGROUND

Plaintiff Qwest Communications Corporation ("Qwest") is a telephone company defined as a public utility under California Public Utilities Code § 216. FAC, ¶ 4. The California Public Utilities Commission ("PUC") has granted Qwest certificates of public convenience and necessity ("CPCN") to provide interexchange, or long distance, telecommunication services. Id. Qwest provides broadband Internet-based data, voice and image connectivity to businesses, consumers and other communications service providers. Id. at ¶ 28.

In December 1999, Qwest won a competitive bidding process and entered into a government contract to provide faster and expanded telecommunications capacity to the Lawrence Berkeley National Laboratory ("LBN Laboratory"). Id. at ¶ 30. LBN Laboratory is the technical administrator and central hub of a program operated by the United States Department of Energy ("DOE") known as the Energy Sciences Network ("ESNET"). Id. at ¶ 21. The ESNET is a high-speed communication network that allows Department of Energy researchers and collaborators throughout the nation access to a community of research facilities, resources and information. Id. at ¶ 22.

In order to upgrade LBN Laboratory's telecommunications capacity, Qwest must install a "local loop" between LBN Laboratory and Qwest's central system. Id. at ¶ 31. This involves constructing a conduit — "a pipeline of sorts" — through which fiber optic cable is strung. Id. at ¶ 32. Sometime in March 2000, Qwest began to formulate a construction plan to lay its conduit through public rights-of-way in the City of Berkeley ("City" or "Berkeley"). Id. at ¶ 32. Qwest met and communicated with city officials from April through December 2000 to negotiate an acceptable construction plan to encroach upon the City's public rights-of-way. See id. at ¶ 33, 35, 41-45. The parties were unable to agree, and Qwest consequently did not obtain the necessary permits to begin construction. Qwest claims that the City refused to process its application after July 10, 2000, pursuant to a de facto moratorium on telecommunications infrastructure construction pending enactment of an ordinance affecting installation of telecommunication services in Berkeley. Id. at ¶ 35-40.

On December 22, 2000, Berkeley enacted Ordinance No. 6608-N.S. (codified at Berkeley Municipal Code §§ 16.10 et seq.) ("Ordinance"), effective January 21 2001 Id. at ¶ 46. On January 23, 2001, the City passed a Fee Schedule to accompany the Ordinance. Id. at ¶ 48. The Ordinance creates a comprehensive scheme intended "to more specifically regulate Telecommunications carriers providing telecommunications services using public rights of ways and other public property." Ordinance § 16.10.010 (attached at FAC, Ex. B).

The Ordinance applies to all telecommunications carriers seeking to encroach upon Berkeley's public rights-of-way to provide telecommunication services. Ordinance § 16.10.030. All carriers must first obtain registration and pay related registration fees, which must be updated annually. Id. at § 16.10.040; see also Fee Schedule 2-3 (attached at FAC, Ex. C). All carriers must also obtain a Special Telecommunications Permit pursuant to § 16.10.050 of the Ordinance and pay additional fees. See also Fee Schedule 3-4. Unless a carrier claims exemption under § 16.10.070, and the City affirmatively determines that an exemption does indeed apply, all carriers are subject to a franchise fee to provide telecommunications services using the City's public rights-of-way. See also id. 5-7.

Qwest filed this lawsuit against the City on February 13, 2001, seeking primarily to invalidate the new Ordinance and Fee Schedule pursuant to the Supremacy Clause of the United States Constitution, U.S. Const. art. VI, cl. 2, and the "conflict with general laws" provision of the California Constitution. Cal. Const. art. XI, § 7. According to Qwest, Berkeley's Ordinance is preempted by the Federal Telecommunications Act of 1996 ("ETA"), 47 U.S.C. § 253 (a) and (c); the California Public Utilities Code §§ 7901 and 7901.1; and California Government Code § 50030. Qwest also asserted claims of violations of the Fourteenth Amendment and Commerce Clause, brought pursuant to 42 U.S.C. § 1983; intentional interference with contractual relationship; ultra vires conduct; and a claim for declaratory judgment of its rights with respect to the City's Ordinance and Fee Schedule.

On May 23, 2001, this Court enjoined Berkeley from enforcing the Telecommunications Carriers Ordinance, Berkeley Municipal Code § 16.10 et seq. (Ordinance 6608), and its accompanying Fee Schedule, pending resolution of this lawsuit. The injunction was based in large part upon the Court's finding that the Ordinance creates barriers to entry in violation of § 253(a) that do not fall within the safe harbor provision of § 253(c). Owest Communications Corp. v. City of Berkeley ("Berkeley I"), 146 F. Supp.2d 1081, 1098 (N.D. Cal. 2001). This Court also declined to exercise supplemental jurisdiction over Qwest's state preemption claim. Id. at 1101-02. Soon afterwards, Berkeley passed Resolution No. 61,102-N.S., adopting Ordinance No. 6630-N.S. and its accompanying Fee Schedule, to regulate telecommunications companies "pending resolution of the legality of the City's current telecommunication ordinance." FAC, Ex. D. ("Interim Ordinance").

Qwest finds fault with a number of provisions of this Interim Ordinance and Fee Schedule, and maintains that, like its predecessor, it imposes an unlawful "third tier" of regulation that is prohibited by both the ETA and California's telecommunications statutes. Accordingly, Qwest filed a first amended complaint challenging this Interim Ordinance and adding new claims. Qwest also added a new cause of action arising directly under § 253 of the ETA and included § 253 as a substantive basis for its cause of action under 42 U.S.C. § 1983. In an Order dated November 15, 2001, this Court dismissed Qwest's claim for relief under § 253, holding that no implied private right of action exists directly under that provision of the FTA. Owest Communs. Corp. v. City of Berkeley ("Berkeley II"), 202 F. Supp.2d 1085 (N.D. Cal. 2001).

Now before the Court are plaintiffs motion for summary judgment on Ordinance 6630, the Interim Ordinance; plaintiffs motion for summary judgment on Ordinance 6608, the original Ordinance; and defendant's motion for summary judgment.

LEGAL STANDARD

The Federal Rules of Civil Procedure provide for summary adjudication when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

In a motion for summary judgment, "[if] the moving party for summary judgment meets its initial burden of identifying for the court those portions of the materials on file that it believes demonstrate the absence of any genuine issues of material fact, the burden of production then shifts so that `the non-moving party must set forth, by affidavit or as otherwise provided in Rule 56, `specific facts showing that there is a genuine issue for trial.'" See T.W. Elec. Service. Inc. v. Pacific ...


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